Which of the following statements is characteristic of variances?
A)Unfavourable variances occur whenever actual prices or actual usage of inputs are greater than standard prices or standard usage.
B)Favourable variances occur whenever actual prices or actual usage of inputs are greater than standard prices or standard usage.
C)Unfavourable variances are always credits.
D)Favourable variances are always debits.

Question

Quizplus · Accepted Answer

Unfavourable variances occur when actual prices or usage of inputs are greater than standard prices or usage. Favourable variances occur when actual prices or usage of inputs are less than standard prices or usage. The terms "credit" and "debit" do not necessarily apply to whether a variance is favourable or unfavourable.

Which of the Following Statements Is Characteristic of Variances